Letting agents warned about unfair landlord fees: here are the new guidelines

The PRS is getting tough on estate agents. Steve Sims highlights the new letting fee guidelines.

Complaints that letting agents are charging landlords and tenants unfair fees have prompted a warning from consumer watchdogs.

The Property Redress Service [PRS], one of three government-backed consumer redress schemes has warned that unless letting agents can show their charges are reasonable, any complaints from landlords or tenants about the fees they pay will be upheld.

To explain what the service regards as fair charges, guidelines have been published for landlords and tenants.

“It’s not our job to set or ban fees, but if letting agents make a charge then we expect them to justify what they have done for the money,” said a PRS spokesman. “If we think the charge is unfair, then the award is likely
to go to the landlord.”

Letting fee guidelines

The guidelines list a number of do’s and don’ts for letting agents:

Letting agents should promote their services to landlords clearly and accurately without misleading them over costs

Any advertised charges should include VAT and letting agents should provide a description of the precise service offered so landlords can make comparisons between letting agents

Letting agents should offer a cooling off period that allows landlords to consider charges and to shop around

Letting agents should disclose any commissions or payments they receive from tradesmen they recommend to carry out repairs and maintenance jobs for landlords

Landlords should only pay for work carried out and letting agents must not claim work is necessary if it is not

Letting agents should explain fees to cancel contracts before any agreement is signed

If a landlord cancels a contract as a result of a letting agent breaching it, then no charge should be incurred by the landlord.

Legitimate and legal

Sean Hooker, head of redress for the PRS, said: “We felt that letting agent fees needed to be looked at and that agents should be provided with guidance on what they can and can’t charge. Tenants and landlords also need help with what they
can complain about and which practices are legitimate and legal.

“Given the importance of this topic, it would have been remiss of us to duck the issue and not to make our agents fully aware of their obligations.”